Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1887-08-17
NATURAL LAW AND RAILROAD MAN
AGEMENT AND CONSOLIDATION.

laws in the business world to give special
attention to the question Of the economic
question of railroad management and con-
solidation. Mr.. Wood is very plain
spoken and practical man, who arrives at
conclusions without abruptness, but with q
directness and force that is praiseworthy in
the highest degree.
1t has by no one else been so tersely or
clearly stated that the natural law of pro-
gress toward civilization and social devel-
opment is by way of communication and
transportation. A road is symbol of civ
ilization, he declares, and the lack of one,
an evidence of barbarism Whoever re-
fleets for single moment upon the mag
ical effects of the practical elimination of
thefactor Of time in bringing the products of
one locality to the market doors of far
distant one, will be the more forcibly i'm
pressed by Mr.. Woods emphatic premise
and conclusion. Scarcely any commercial
subject opens up to the mind such broad
suggestions and limitIess examination as
this one: "What has the railway done in
responding to the needs and desires of
men and the growth of society, by lessen
ing the distance between producer and
consumer? 2"
Mr.. Woods chapter on railways as ben
efts, cannot be examined here. but his con-
clusion upon the question of railroad con-
solidation cannot be dismissed with a
passing notice. 1t is the result of an i'm
partial and exhaustive inquiry, and
the logical conclusions reached by trained
reason. Tracing the means and machines
of communication and transportation from
the earliest wheeled vehicles, to the first
turnpikes Of England early in the eight
zenith century, to the first daily mail be-
tween London and Paris in 1888, to the
date but hundred years ago when it cost
So to transport a barrel of -four 100 miles.
and down to the present era Of railway
building, he shows that railway invest
ment is not well suited to small proprie-
tors, for it is a natural law that as the in
terest between the investor and investment
increases, the dangers from waste and mis-
management increases in like proportion.
Restrictive legislation on the subject
Of railroad traffic is unwise and contrary
to the law of supply and demand" He
points out what the true field of legis-
lation upon the railroad question is, con-
lining 1t, upon a natural basis, to enact
ments in restraint of fraudulent acts and
speculations, so that railroad managers
shall not profit by their superior knowl-
edge of the trust they discharge, to
the detrinent of other stockholders. But
as to consolidation of railways, of which
aggregations of power and capital popular
sentiment, where not fully informed and
broadly intelligent upon the subject, is dis
trustful, he holds that it is not only caused
by natural law, but is also ruled by it,
facts that are entirely overlooked.
Even though the process went on until
there was but one gigantic system, it would
still be subservient to the imperial edicts of
supply and demand. For if it attempted
to make artificial rates, or those even a
little above the normal, then in a greater
proportion demand would fall off and bust
ness and profits decrease. Thus supply
and demand act as promptly as properly
adjusted governor" of steam engine.
This is high and broad ground to take,
and squarely confronts the sensational op-
posing views maintained by nervous jour
nails and political demagogues with whom
the possibility of consolidation grows into
a monstrous aristocracy and grinding and
merciless monopoly.
No such fears agitate the essavist. He
points out that in England the originally
chartered roads only averaged fifteen miles
in length. In 1S47, 5000 miles were owned
by several hundred different companies,
and in 1872 $4,000 miles, nearly all owned
by twelve companies, and this tendency
has been nearly as marked in our own
country for instance, between the Hudson
and Lake Erie the New York Central
road originally belonged to sixteen differ
ent companies. Now consolidation has
not been by chance, but in obedience to the
pressure Of natural laws; the natural de-
mand for decreasing rates, together with
competition, have made it Indispensable
1t Is, he adds, a case of the survival of the
fittest, and of a development of the
lower into the higher. In no other yay
could such remarkable reductions in rates
and vast increase of business have been
brought about. Under no other plan
would such degree of perfection in appli-
ances and rapidity of service be possible.
Old-time travellers will recall the facts
Mr.. Wood rec.tes, that prior to the opera
ton upon railways of the law of consolida-
ton and combination, passengers paid
vastly higher fare, changed cars and bag
gage at the end of each short line. and
waited hours to do so with many disoom-
forts, and all the labor of rechecking bag
gage, etc. But contrast that time with the
present, when a consolidated system of a
thousand miles renders the public service
immeasurably superior in luxury. cheap
neSs, speed and safety, to that which would
be possible with any half dozen distinct
corporations. Re-stating the proposition,
that to great extent rates fix themselves,
he declares that legislation is futile. be-
cause priee-making is outside of its prov
inee, and because no two roads are alike in
business, location, cost of maintenance.
character of traffic, and many other condi-
tions. We quote:
Take the extreme ease of a road thst has no
possible competition. If even such a road at
tempts u impose artificial rates, business is
hahpered settlement of tributary territory dis
cotIaSeu, manufactures excluded and profits
actually diminished. Railroad men have mt
yet al become aware of these facts hut rhev arc
rapidly learning them and also that a broaA
ana hDersil policy Is the most profitable In no
othtr kiad OF business Is the old familiar n-in-
clpie OF " large sales and small proftsn so an
plieaole and Profitable AS in railroad transnorfa
ton The reason for this is that a Iarrs nsrt
of the expenses consists of fixed cisar5as ;.
which are unchanged, whether the tr1fiis he
large or small. Outside of these. expenses in
crease much more SLOWLY than the amount of